Shafaqna Pakistan: The federal government has set June 2027 as the deadline for deregulating petrol prices under a broader plan to overhaul the country’s fuel pricing system and promote competition in the petroleum sector.
The decision was made during a meeting of the Petroleum Pricing Committee, chaired by Petroleum Minister Ali Pervaiz Malik, where officials reviewed proposed changes to the existing pricing mechanism, according to a report.
The proposed reforms seek to improve transparency and predictability in fuel prices while shielding consumers from the immediate impact of sharp swings in global oil prices.
The committee also approved guidelines for government intervention in diesel prices during emergencies. The framework outlines specific triggers for exceptional price shocks and measures that could be taken to mitigate their impact.
Officials also examined the existing petrol pricing formula as part of preparations for the shift towards a deregulated market.
The committee agreed to forward its final proposals to Prime Minister Shehbaz Sharif for approval.
It also endorsed a revised method for calculating the Inland Freight Equalisation Margin (IFEM), which forms an important part of petroleum pricing. The Oil and Gas Regulatory Authority (Ogra) informed the meeting that its audit of IFEM for the financial year 2025-26 would be completed by the end of calendar year 2026.
Ogra was further directed to prepare recommendations regarding the consolidation and performance of existing oil marketing companies. The review will focus on improving efficiency through international best practices and modern technology.
The committee also considered proposals for creating a petroleum price stabilisation fund based on international models. However, it concluded that maintaining sufficient strategic fuel reserves would be more suitable as the country moves towards eventual deregulation.
The proposed changes are intended to gradually replace government-administered fuel prices with a competitive market-based system while limiting the effect of sharp international oil price movements on consumers.
Meanwhile, a subcommittee headed by Mir Naeem Ghauri will meet the Federal Board of Revenue (FBR) chairperson to review whether changes to the petroleum sector’s taxation framework are required in light of evolving market conditions.
Source: Dunya News
